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Voices on Reporting - Special session: Ind AS 115 and IFRS 16 - Impact on transport, leisure and sports sector

Voices on Reporting - Special session

Continuing with the series of special sessions, this session focusses on the Transport, Leisure and Sports sector. In this session we discussed the key significant areas relating to Ind AS 115, Revenue from Contracts with Customers, and IFRS 16, Leases on transport, leisure and sports sector, where current guidance under Ind AS is expected to change due to implementation of new standards.

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Continuing with the series of special sessions, this session focusses on the Transport, Leisure and Sports sector. In this session we discussed the key significant areas relating to Ind AS 115, Revenue from Contracts with Customers, and IFRS 16, Leases on transport, leisure and sports sector, where current guidance under Ind AS is expected to change due to implementation of new standards.

Ind AS 115: The new revenue standard provides guidance that applies to contracts with customers in all sectors and changes the core principle that requires companies to evaluate their transactions in a new way. Revenue is a crucial financial performance indicator for companies and the new standard is expected to have pervasive impact due to the addition of significant new concepts on recognition, measurement and disclosure of revenue. Therefore, companies in this sector would need to evaluate the impact of Ind AS 115 on revenue accounting of multiple arrangements and timing of revenue recognition.

IFRS 16: The standard provides a new method for lease accounting and would be applicable internationally from 1 January 2019. It is expected that in India this standard would replace Ind AS 17, Leases and would be applicable from 1 April 2019. The new standard would bring fundamental change in lease accounting by requiring most leases to be recognised on the balance sheet by a lessee. The proposed accounting guidance is likely to impact a large number of entities operating in diverse sectors. In this session, we discussed the key implementation issues for transport, leisure and sports sector.

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